Investors in the Tokyo stock market will focus on US corporate earnings reports amid fresh concerns over the health of the world's biggest economy, analysts said Friday. "American corporate earnings often affect the (US) market," which in turn will influence Japanese shares, said Toshihiko Matsuno, head of research at SMBC Friend Securities.
In the coming week, steelmaker Alcoa and oil giant Chevron will report second quarter financial results. But there may not be significant swings in share prices, analysts said.
"I think Japanese shares will largely move within a limited range," Matsuno said. Over the week to July 3, the Nikkei-225 index lost 61.32 points, or 0.62 percent, to 9,816.07. The Topix index of all first section shares dropped 6.18 points, or 0.67 percent, to 920.62. With little domestic data due next week, June machinery orders will be in the spotlight on Wednesday.
"Machinery orders offer an opportunity to assess the near-term capital expenditure trend, and the figures will likely be weak," Barclays Capital analysts wrote in a note. The Group of Eight summit in Italy on July 8-10 could also provide fresh news, as world leaders mull "exit strategies" from their massive economic stimulus efforts, Nomura Securities said in a memo to clients. Nomura expects the Nikkei to move in a range of 9,600-10,100 points.
Investors will also monitor political developments, with Prime Minister Taro Aso's ruling Liberal Democratic Party in disarray ahead of elections that he must call by September.
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